Maharashtra: Dairy farmers uncertain over fate of govt subsidy


New Delhi, November 09, 2018: Uncertainty continues over the future of the state government’s Rs 5 per litre subsidy to dairy farmers as dairies fear another spell of price crash at the start of the flush season. Despite the drought, milk production in Western Maharashtra is supposed to touch record high, which might spell trouble for farmers and dairies alike.

Dairy farmers in Maharashtra had taken to the streets to highlight their plight in view of dairies reducing their procurement price. This despite the state government fixing the procurement price of milk with 3.5 per cent fat and 8.5 per cent SNF (solid-not-fat) at Rs 27 per litre. Global crash in prices of Skimmed Milk Powder (SMP) had made exports nonviable and had led to unsold inventory, which was cited as one of the reasons for dairies for their decision to cut on the procurement prices.

Subsequent to the protest, the state government had announced a Rs 5 per litre subsidy to be paid to farmers to help them realise at least Rs 25 as their procurement price. In the Pune division — which includes districts of Pune, Satara, Kolhapur, Sangli and Solapur — till last week, 22 dairies had participated in the scheme and received subsidies worth Rs 65.85 crore. As against 17 private dairies, 22 cooperative ones had participated in the scheme from Pune.

The scheme, which was announced in July, is to end in November and the absence of any fresh directive from the state government has worried the sector. Dairies say the scheme ends right at the start of the flush season when milk production naturally increases. The spectre of drought, which has cast its shadow in other parts of the state, has not affected the availability of water or fodder and thus dairies feel milk production will not fall much in the region. The Kolhapur District Cooperative Milk Producers Union — brand Gokul — feels their milk production is set to increase from 12 lakh litres per day to 15 lakh litres according to 

Dairies feel that in view of the increase in milk production, the state government is likely to continue the subsidy but final word in this regard is still waiting. Govind Mitra, managing director of Phaltan-based Govind milk and milk products, said they are hopeful of the state government continuing with the subsidy. “We are continuing with our part of the deal, i.e paying farmers Rs 20 per litre and hope the state government agrees to pay the additional Rs 5 per litre,” he said.

Meanwhile, SMP exports from the state have seen an upwardly trend mainly due to the Rs 50 per kg subsidy provided by the government. Around 3,400 tonnes of SMP has been exported from the region with main market being Bangladesh, Sri Lanka etc.


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